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Saturday, May 20, 2017

There is a new IMF economic forecast for Latin America, and after years of reading and blogging about them, I can say they vary little. In fact, one of my goals when I teach Latin American Politics is to drive home the basic argument:

Growth is up when commodity prices are upGrowth is down when commodity prices are down
See how easy that is? Latin America is a commodity-dependent region, period.

But there is a new and ugly twist.

The outlook and risks for Central America and Mexico are being influenced by their exposure to the United States through trade, migration, and foreign direct investment. Mexico’s real GDP growth is expected to decelerate to 1.7 percent in 2017. Uncertainty about future trade relations with the United States and higher borrowing costs are expected to more than offset the positive effect from stronger U.S. growth.

Sadly, the Trump administration is hurting Latin American economies just from uncertainty and incompetence.